April 11, 2019 — A recently published report has pointed out numerous problems with China’s seafood processing sector, highlighted by labor shortages, low technical capacity, rising costs, and not enough spending on research and development.
China’s seafood processors are living on borrowed time, according to the report, which was published by the China Industrial Research Network, an economic research agency. The sector looks strong owing to its scale, but is actually weak, “as the main advantage is low-cost labor” and this advantage will eventually evaporate. Too much processing material is shipped in by foreign firms, the report concludes.
“Higher incomes in China will mean low-cost, low-tech goods production will be eliminated in China and replaced by other countries with less-developed economies,” the report said. “If you still insist on operating in the current mode, you will only end up with failure.”
This prognosis won’t come as a surprise to anyone watching China’s economy. Last year was the first that the country’s labor force contracted in size since China started its economic reforms in 1979. Wages are rising for China’s labor force and the country’s demographics point to a fast-aging society.